A MAJOR switch from traditional construction to engineering services, has built rising profits and sales for Cheshire-based Amec.

The engineering giant, which is now the biggest in Britain, has returned to growth, after being hit by the difficult industrial markets a couple of years ago.

Today the company, which already has some lucrative re-building contracts in Iraq, and is hopeful of success in its bids for billions of dollars more, announced pre-tax profits of £112.5m, for the year ended December 31. That is up seven per cent on the previous year's £105.2m, on turnover of more than £4.7bn, up nine per cent on the previous year's £4.3bn.

The company says its regional services have become its largest single market sector and today's results are a success marker for a major change in the way it operates.

It has moved from focusing on mega-sized projects, and concentrates on large numbers of small, short-term contracts across Europe and the US.

Chief Executive Sir Peter Mason said: "These results confirm the transformation of our business from traditional construction to engineering services, with two-thirds of income generated by our services and investments activities."

There is also good evidence of recovery in the North American industrial markets, he said. In the US, since January 1 this year, Amec has either been awarded contracts or confirmed as preferred bidder on projects expected to be worth about £100m.

Through its partnership with American-based Fluor, Amec is already working on contracts worth around £100m, restoring power generation in Iraq. It will share the profit from this work with Fluor on a 49 per cent/51 per cent basis.

Through the joint venture, it is also actively bidding for seven more contracts in sectors including power and water, which will be worth around £3bn.

The outcome of the bids is expected either later this month or in early April.